A nationwide class action against an Indiana insurer that alleged more than 3,600 policyholders were overcharged for premiums has been resolved through a $27 million settlement, plaintiffs’ attorneys said Friday. The settlement provides that each class member will receive at least $500, but most will receive $1,000 or more.
Indianapolis attorney Kathleen DeLaney of DeLaney & DeLaney LLC announced the settlement with Conseco Life Insurance Co. DeLaney and Weisbrod Matteis & Copley PLLC represented policyholders in the federal suit filed in 2012.
Policyholders allege Conseco and its parent companies, Carmel-based CNO Financial Group Inc. and CNO Services LLC, overcharged policyholders through improper premiums and cost of insurance charges. The plaintiffs claim thousands of policyholders consequently gave up their policies or let them lapse, resulting in the loss of tens of millions of dollars in valuable life insurance policies.
The CNO defendants are not included in the settlement. Litigation is continuing concerning their alleged liability. Spokespeople for CNO did not immediately reply to messages seeking comment.
“This is a great start,” DeLaney said, “but most of the millions of dollars in profits from the overcharges went to the parent company and its affiliate, and we’re going to continue to pursue a further recovery from them for the benefit of former policyholders.”
The settlement approved Wednesday in the U.S. District Court for the Southern District of Indiana provides Conseco Life will pay $27 million, less fees and expenses, in cash compensation to approximately 3,666 policyholders who owned LifeTrend 3 and LifeTrend 4 policies. The case filed is Burnett, et al. v. Conseco Life Insurance Co., et al.
Under terms of the settlement order signed by District Judge James P. Hanlon:
“The victims here were mostly elderly retirees and are some of the most sympathetic plaintiffs you could imagine,” said Stephen Weisbrod, who was co-lead counsel with DeLaney. “We’re thrilled to be able to help them.”